Vol:1No:1April 1968 VALUE ENGINEERING Inthisissue Page Editorial-L.D.Miles -Rules of theGame5 LowCost Designin theAircraftIndustry7 byG. P. Jacobs,Manager,Value Engineering,British AircraftCorporation{Operating) Ltd.,WeybridgeDivision. Value Engineering, its Contribution toProfitability11 byRex Ferguson, Engineering and Industrial Consultant TheValue Engineering Association13 Sharpen up your SellingPower with Value Analysis15 byK.W. Hiles,Lecturer,StHelens School of ManagementStudies TheProduct Development Processillustrated with referencetoDomesticAppliance19 Development byA. R.C. Morphy,DevelopmentManager,PortableApplianceDivision,BritishDomestic Appliances Ltd. Value Engineering in Rolls-Royce Aero Engine Design23 by L.W. Crum,ChiefValue Engineer, Rolls-RoyceLtd.,AeroEngine Division Purchasing's Contribution toValue Analysis27 byDennis C. Simpson,Purchasing Controller,The RankOrganisation Economic Productionand its Disciplines29 byAnthony R.Tocco,DirectorofValueAssurance,TR WSystems Value Assurance Checklist for Product Design37 TheValue Engineering Functional Approach Techniques43 byFrederick S. Sherwin,ValueEngineering Co-ordinator,The PlesseyCompany Ltd. TheImportanceof Search Techniquesin SolvingProblemsofValue49 by J. HarryMartin,ManagerofValue Engineering and CostImprovementProgram, General ElectricCompanyOrdnance Department,DefenseElectronicsDivision TheTechnique ofValue Engineering as an Aid toProfit Improvement51 by J. Burnside,Value Engineer, Lindustries Ltd. On Catching theFleeting Thought53 byC. HearnBuck, Lecturer,Universityof AstoninBirmingham TheValue Engineer's Bookshelf57 Selected Abstracts on Value Analysis/Value Engineering61 PergamonPress 4f TheAIMofValueEngineering istoencouragethewideruseofvalueanalysis/engineeringtechniques throughoutindustry. ValueEngineering providesalinkbetweenthosewhoarepractisingandstudyingthesubject allovertheworld. Itis thePOLICYofthejournal tocontaininformationwhi chpromotes thewiderandmoreefficientapplication ofvalueanalysis/engineering methods. ItsABSTRACTINGSE RV I CE willdrawattentionin a conveniently summarised form tothemainpublications onthesubject throughouttheworld. *** InformationRetrieval Toassistwiththeretrievalofinformationonvarioussubjectskeywords (showninitalics)havebeengiventothearticles, bookreviews andabstracts in this journal. Keywordcards,5" x3",arrangedinalphabeticalorder,mayhavethereference tothepageonwhi chthearticle,etc., appears entereduponthem. 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Postage will be paid by licensee Nopostage stamp necessary if posted in GreatBritain orNorthern Ireland BUSI NESSREPLYSERVI CE Li cenceNo. OF. 234 Val ueEngi neeri ng, Subscr i pt i onDepar t ment , Per gamonPressLt d. , Headi ngt onHi l lHal l , Oxf or d, Engl and. Affix postage Val ueEngi neer i ng, Subscr i pt i onDepar t ment , Per gamonPress I nc. , 44- 0 121stStreet, LongIsl andCi t y, NewYor k1110 1, U.S.A. FIRST CLASS Permit No. 663 Long Island City, N.Y. BUSI NE SSRE PLYMAIL No Postage Stamp Necessary if Mailedin the United States Val ueEngi neeri ng, Subscr i pt i onDepar t ment , PergamonPress Inc., 44- 0 121 stStreet, LongI sl andCi t y, NewYor k11101 U.S.A. Inthisi ssue: L o wC o s tDes i gn i nt heAi r c r a f t I ndus t r y G.P.Jacobs Manager ,Val ueEngi neeri ngatt he Weybr i dgeDi vi si onoft heBri ti sh Ai r cr af tCor por at i on( Oper at i ng)Lt d. Val ueengi neer i ngas' organi sedef f or tdi rect edati dent i f yi ngt henecessary f unct i onst obeper f or med,andf orachi evi ngt hosef unct i onsf orleastcost commensur at ewi t hper f or manceandt i me- scal e'avoi dst heassumpt i ont hat , bydef i ni ngt hef unct i on,t heper f or manceoft hepr oductcanbedef i ned. ' Costcor r ect i on'or' havi ngasecondgo'att hedesi gnisarel at i vel yexpensi ve process. Af t er' Costcor r ect i on't hereis' Costavoi dance'whi c hist heachi evementof t hebestval uesol ut i onbef oreexcesscostiscommi t t edbydet er mi ni ngt he correctal t ernat i vesdur i ngt hedesi gnst age. V a l ueE ngi neer i ng, i t sC ont r i but i on t oP r of i t abi l i t y RexFerguson Engi neeri ngandI ndust ri alConsul t ant . Thereisneedf orr ecogni t i onbyt opmanagementt hataVal ueEngi neeri ng Depar t mentisat op- l evelact i vi t y. Inmanagementt heaccentisof t ent oomuchonCostReduct i onandt ool i t t l e onProf i tI mpr ovement . Sha r p e nup yourSel l i ngP o we r wi t hV a l ueAna l y s i s K.W.Hiles Lecturer,St.Hel ensSchoolof ManagementSt udi es. Val ueAnal ysi scanbef ashi onedbymar ket i ngmanagersi nt oausef ul' t ool 'f or i mpr ovi ngt hepenet rat i ngpoweroft hei rsal esmen. Sal esmenwh oaref ami l i arwi t ht heanal yt i calmet hodsappl i edi nusi ngt hi s t echni quecanbeofconsi derabl eassi stancet ot hei rcust omersi nhel pi ngt hem t oarri veatabetter,mor ef unct i onal ,morerel i abl edesi gnf oral owercost. T h eP r oduc tDevel opmentP r o c e s s i l l us t r at edwi t hr ef er encet o Do me s t i cAppl i a nc eDevel opment A.R.C.Morphy Devel opmentManager ,Port abl eAp -pl i anceDi vi si on,Bri ti shDomest i c Appl i ancesLt d. Sevenobj ect i vesbeforedevel opmentwor kbegi nsareout l i ned,andpract i cal met hodsf orobt ai ni ngopt i mumdesi gnsol ut i onsaresetf or t h. Theresul tsoft heappl i cat i onoft hi sappr oacht ot he' Cl assi c'i ronaredescr i bed. Val ueengi neer i ngbestcomesi natt hest agewher eaf i r mdef i ni t i onoft hepr o-posedpr oductdesi gnhasbeenreached. ' Abadl yconcei veddesi gncannotberetri evedbygoodwor ki nt helaterstages.' V a l ueE ngi neer i ng i nRo l l s - Ro y c e L.W.Crum Chi efVal ueEngi neer,Rol l s- Royce Lt d. ,Aer oEngi neDi vi si on ThecompanyhasprovedVal ueEngi neeri ngt obe'awel l - or gani sedappr oacht o costr educt i on'andawor t hwhi l el evelofsavi ngshavebeenachi eved. Theor gani sat i onofVal ueEngi neeri ngi nRol l s- Royceisdescri bed. Tr ai ni ngisnowpr ovi dedf orallst af fwh oarei naposi t i ont oi nf l uencecost s. P ur c ha s i ng' sC ont r i but i on t oV a l ueAna l y s i s DennisC.Simpson Purchasi ngCont rol l er,TheRank Organi sat i on Speci alreferenceismadet ot heval ueofgai ni ngt heco- oper at i onoft hespeci al i st suppl i er. Thehel pwhi c hmaybeobt ai nedf r omt heconst r uct i onofcompar at i vecostand t echni caldataisdescri bed. Itisessenti alt hatPurchasi ngdoesmuchoft hegr ound- wor kpri ort oVal ue Anal ysi swor kshopsessi ons. E c o n o mi cP r oduct i on and i t sDi s ci pl i nes AnthonyTocco Di rect orofVal ueAssurance,TWR Syst ems Thei ncreasi ngcompl exi t yofpr oduct sandsyst emshasf or cedmanagement t owar dst hedevel opmentofnewappr oachesf ort hemanagementofresources. Thewr i t erdescri besf ourmet hodol ogi es-Qual i t y,Rel i abi l i t y,St andardi sat i on andVal ueEngi neeri ng-whi c hpr ovi demanagementwi t ht he' t ool s'requi red t omeett hechal l engeofdomest i candi nt ernat i onalcompet i t i on. T h eV a l ueE ngi neer i ng Funct i onalAp p r oa c h T e c h n i q u e s FrederickS.Sherwin Val ueEngi neeri ngCo- pr di nat or , ThePlesseyCompanyLt d. Val ueEngi neeri ngdoesnotconcent r at ei ndept hi nanyonearea( Desi gn, Pr oduct i onorPur chasi ng)t ot heexcl usi onofot hers.Itstartswi t ht hedef i ni t i on oft hecust omer ' sneedsandt henproceedst hr oughanorgani sedandsyst emat i c pr ogr ammet ocreatet heopt i mumdesi gn. Anopt i mumofcost / val uerati osist heai m. Value Engineering, April1968 1 T h eI mpor t anceof Se a r c hTe c hni que s i nSol v i ngP r obl e ms ofV a l ue J.HarryMartin ManagerofVal ueEngi neeri ng andCostI mpr ovementPr ogr am, GeneralEl ectri cCompany Or dnanceDepar t ment ,Def ense El ect roni csDi vi si on Asi mi l ari t yi npr obl em- sol vi ngmet hodol ogybet weenDescartesi nt he17t h cent ur yandMi l esi n t he20t hcent ur yis referredt oandt heneed f orVal ueAnal yst s -ift heywi sht obesuccessf ul-t omastersearchski l l sisstressed. Val ueEngi neeri ngisasear ch- or i ent edphi l osophywhi c htestspr oduct sf orreal val ue. Thet hr ee- st eppr obl em- sol vi ngphi l osophyofDescartes( i nt ui t i on,deduct i on andi nduct i on)isof f eredasi deal l ysui t edt opr obl em- sol vi ngi nVal ueEngi neer-i ng. T h eTe c hni queof V a l u eE ngi neer i ng a sanAi dt o P r of i tI mpr ovement J.Burnside Val ueEngi neer,Li ndust ri esLt d. Thearti cl eexpl ai nswhatval ueengi neeri ngisandout l i nest hestagesi nt he V.E.Jo bPl an. Theaut horstressest hegr oupnat ureoft heact i vi t yandhol dst hatt heappl i cat i on ofval ueengi neer i ngi nanor gani sat i onbri ngsanewdi mensi oni nt ot hewor ki ng l i vesofallwh oarei nvol vedi ni t. O nC a t c hi ng t heFl eet i ngThought C.HearnBuck Lecturer,Uni ver si t yofAst oni n Bi r mi ngham. Thereisneedf orarel axedstateofmi ndf orpr obl em- sol vi ng.Fearofcri t i ci smis af or moft ensi onwhi c ht hebr ai nst or mi ngt echni quehel pst oover come. Ideasmayal sobest i mul at edbyanal ogyandbyusi ngcheckl i st s. C H E C K L I S T SVal ueAssur ancei nPr oductDesi gn Waysi nwhi c hUnnecessaryCost sAri se B O O KR E V I E WSFirstEuropeanValueConferenceProceedings(Lesl i e,H.)(ed. ) TheUseofLateralThinking( deBono,E.) GlossaryofManagementTechniques( Bar r acl ough,S.)(ed. ) CreativityatWork( Si mber g,A.L.) PrimaryStandardData(Neal e,F.J. ) ProblemsofProductDesignandDevelopment( Buck,C.H.) ValueAnalysis/ValueEngineering( Fal con,W.D.)(ed. ) TheLearningCurve( Jor dan,R.B.) SAVE,Volume1(Ross,T.A. )(ed. ) NegotiatedPurchasing( DeRose,L.J. ) ValueEngineering1959( Mandel kor n,R.S.)(ed. ) SecondEuropeanValueConferenceProceedings( Bowyer ,F.)(ed. ) WorkMeasurementandCostControl( Gr aham,C.F.) ValueEngineeringandAnalysis( Roder i ck,M.D.)(ed. ) CostEstimatingandContractPricing( McNei l l ,T.F.andCl ark,D.S.) EngineeringMaterials-SelectionandValueAnalysis(Sharp,H.J. )(ed. ) ElectronicsIndustryCostEstimatingData(Hart meyer,F.C.) ValueAnalysis( Gage,W.L.) ValueEngineeringinManufacturing( Wi l son,F.)(ed. ) A B S T R A C T S[ 1 ] t o[ 1 4 ] 2Value Engineering, April1968 INT H ENE X TI S S U E : ThePreparati onandUseoft heVal ueEngi neeri ngFunct i onalChart byArthur.Mudge,Director,ValueEngineeringServices,JoyManufacturingCompany. ThePurchaseOrderDraf tSyst emusedbyKaiserAl umi ni umI nt ernat i onal Packagi ngMat eri al sandFactorsi nPackagi ngEval uat i on byBryanHarrison,ManagingDirector,ControlledPackagingServicesLtd. Val ueAnal ysi satt heRoverCompany byV.M.Hanks,EngineeringOperationsManager,TheRoverCompanyLtd. TheOperat i onalCharacteri sti csofVal ueEngi neeri ng byJ.J.Kaufman,ManagerofIndustrialandValueEngineering,HoneywellInc.,AerospaceDivision. TheCreati veAspect sofVal ueEngi neeri ng byLt.ColonelBertDecker,USAFR(Ret.) EssentialFactorsf oraSuccessf ulVal ueAnal ysi sExercise ... byP.Astle,GroupValueAnalysisEngineer,AutomotiveProductsCo.Ltd. TheChal l engeofV.E.-FirstApprai sal byFrankR.Bowyer,Consultant,ValueEngineeringLtd. Ho wVal ueAnal ysi scanAi dPurchasi ng byHarryL.Er/icher,oneofthefoundersofValueAnalysis. TheAppl i cat i onofV.E.Effortf orMax i mumEffecti veness byG.P.Jacobs,ManagerofValueEngineering,BritishAircraftCorporation(Operating)Ltd. Val ueEngi neeri ngasTr ai ni ngf orManagement byFrederickS.Sherwin,ValueEngineeringCo-ordinator,ThePlesseyCompanyLtd. Value Engineering,April1968 3 As our Sales Manager's old granny used to say WHEN YOU WANT SOMETHING So that's what we're going to do. Ask nicely.DoyouuseRi gi di zedmetalandifso,whatf or ? We' retryi ngtocompleteourli stofallthethi ngsthatourthree di mensi onalpatternedsheetisusedfor.Webelievethatwe' llget morewi lli ngandvalidanswersfromadi rectquestionthanfrom tri cksorfunnycoupons. Bytheway,ifyoudon'tuseRigidizedmetal,contactusanyway, we' lltellyouallaboutit. Rigidizedmetalsaveswei ghtandmoney,hasupto108%greater sti ffness,70%morebucklingstrengththansi mi larplainsheet.It resi stsscuffi ng, scratchi ng andfi ngerpri nts.Inferrous,non-ferrous plasti ccoated,colouredorperforatedmateri alsforproducts as di verseas ki ck-plates, vanfloorsandcurtai nwalls. ULJT_1I__] Askforfurtherinformation RigidizedMetalsLi mi ted, 48HighStreet-EdgwareMi ddlesex.Telephone : 01-9526601 4Value Engineering, April1968 ReprintNo.1:1:1 Editorial MrL.D.MILES,PresidentofMilesAssociatesInc.andoneofthefoundersofthetechniqueofValueAnalysis andValueEngineeringhaskindlyacceptedtheinvitationtowritetheeditorialinVolumeOne,NumberOne issueor" Val ueEngi neeri ng.Readers,MrMiles.... Rulesof theGame Happiness,satisfactionandthegratificationofman'sdesires stemfrom success in the game he is playing. The explorers of the arctic, the explorers of the atom, the establishersof a better form ofgovernment,andthediscoverersandcontrollersofagerm allplay their games by the rules of that specific game and -when successful -achievea satisfyinglife in its many forms. Satisfac-tionis the resultof success in the game a man is playing. Success brings goodlife toothers,good jobstoassociates and employees,andoften benefits to a wide circle of 'users'. Success inthegameofidentifying, understandingandneutralisingthe deadly polio virus not only brought happiness and satisfaction to thegameplayers,butalsobroughtresearchassignments for assistants,workfor scoresof technicians,usefor andmarkets formany materials,much manufacturing work, communication work, and sales work -allin addition to the prevention of pain, the reduction of crippling and the saving of lives. Tolosethegameinlifeweareplaying means-attheleast -disappointment,displeasureanddislocationtoourfamilies andassociates, andoften alsotoemployees,suppliers, users of our productor service, andto a hostof others. Inthe highest sense it is incumbent on each of us to winthe game inlife we are playing, be that game the saving of lives, extending specificknowledge,orprovidingneedsandwantsforbetter humanliving.To win the game we areplaying we must playby itsrules -not by the rules it didhave,or the rules we wish it had, oreven the rules we like. Therulesofthecommercialandindustrial game havealways basically been toidentify a needin the sphere of humanliving, andto fashion the materialsof nature -modified asrequired by man's knowledge -tofillthatneed.Thequestfor fasterships, bettertools,moreefficientrefrigerators,morecomfortable homes and more efficient motors was stimulated by the 'Rules of theGame'.Thewinnersof thatgame broughtgreathappiness and satisfaction to themselvesand a hostof benefits toothers. Just as the rales of the game of life change when the childmoves onin age from five to seventy-five (not because he wants them to changeandprobablywithouthisimmediaterecognitionthat theyhavechanged)sotherulesofthegameofindustryand commercemay change,andindeed now havechanged. The rules of the game of commerce and industry, and also of the game of governmenthave changed.They now are(1) to identify needs in the sphere of humanliving,(2) to fashion materials of nature(modified by man's knowledge) tofulfil these needs, and (3)to consume as little of nature's materials andof man's energies aswillan enlightened,effective competitor. Businessmenthroughouttheworldconfrontedwiththese 'Rulesof theGame'areplanning tomakethema helpinstead ofahindranceincompetitive businessareas.Intothebreach openedby this business need grew the systematic approachesand techniquesof Value Analysis and Engineering. Already products (andsometimescomplete businesses) by the hundredshave been changedfrommountinglossesandcertaindeathtogrowing earningsandassuredfuture byusingthesespecifictechniques whichwerecreatedfor thatonespecific purpose. Intheyearsofresearchwhichwentintothedevelopmentof thissystemit wasfound thatthe lethal shortcoming in relation tospecific productsorserviceshavingdangerouscosttrouble wastoooften not receiving intensecorrective studyand action. Toooften the'deadly' area of needwent unattendedending the lifeofthatproductorbusiness. Itwasfoundthatoveralleffectivenesscomparablewiththe resourceful competitor in any situation can be lost in any one or moreofthebusiness areasofMarketing, Engineering Design, Manufacturing,Purchasingorinmanagementeffectiveness. Basic approaches weredevelopedtomeetthisneed. Forcenturiesonendyourgreatnation,Britain,hasmetchal-lengeswhich,atthetime, have seemedtodefy solution. Each time, in the hour of serious peril, you have selected and developed ideas,methodsandsystemswhichmettheneedandyou have wonthe game on the basis of its rulesatthattime. Now, when seriouscompetitivesituationsthreatenthehealthofyour commercialandindustriallife,itismostgratifyingtoseethe developingskillintheproceduresandtechniqueswhichwill reversethattrend. Itis my own very greatpersonalhonourto have hada part in thedevelopmentof thetechniques,methodsandapproaches of ValueAnalysisandEngineeringwhichwillassistyourpeople toagainslaythedragon. Value Engineering,April1968 5 Miscellany Mr .Har r yL.E r l i cher Sir, Ihave been retired from thepostof GeneralPurchasingAgent withGeneralElectricCompanyinSchenectady,N. Y. some twenty-oneyears.Inresponsetoyourrequestconcerningthe earlydaysof ValueAnalysis Iamenclosingcopiesofseveral articleswhichIwrote, andIhope theywillbeofuse. Withgood wishes for your new journal, Yourstruly, (sgd.) Harry L.Erlicher (Ed.Mr Harry Erlicher writingon1st February,1968 from his homeat29RayStreet,Schenectady12309,N.Y.,U.S.A. enclosedan article on 'How Value Analysis CanAidPurchasing' whichwillbepublishedin thenext issue of this journal. This interesting extractis from an article written by Mr Erlicher which gives15 requisitesfor a salesman andconcludeswith this picture of the salesmen heliked most-Trespectmostthesalesmanwhoknowshisproductand thenewthingsthatarebeingdevelopedbyhiscompany or his industry; the man who shows interestin my problems andcanhelpmesolve them through mutualco-operation. Iwillgive all thetime necessary tothis typeof salesman-yes -evenings,Sundays, or any other time.' This waswritten by a man who received calls from10,000 sales-men a year.) I nt er nat i onalV a l u eE ngi neer i ngC o n f e r e n c e 21st Anniversary of Value Analysis/Engineering Thisyearmarksthe21styearaftertheformulation ofthe techniqueof Value Analysis/Engineering. Tomark the occasion Value Analysis Inc.and Value Engineering Ltd.(twooftheforemosttrainingorganisationsinthefield) havearrangedanINTERNATIONALVALUEENGINEER-INGCONFERENCE to be held in Washington, D.C. during the week beginning 19th August, 1968. The Conferencewill also celebrate the10th Anniversary of Value AnalysisInc.andthe5thAnniversaryofitstransatlantic associate -Value EngineeringLtd. MrHowardLeslie(ManagingDirectorofValueEngineering Ltd.)hasannouncedthatacharterflightwithConference delegatesfromEuropewillbeleaving London for Chicagoon 5thAugust next. Afterspendingtwoweeksinthemid-WestandontheWest Coastof America wheredelegateswillhave theopportunity of meeting American value engineers thegroupwillleaveChicago forWashington to attendtheConference. The ConferencethemewillbeVALUEENGINEERING AND ITSFUTURE ON AN INTERNATIONALBASIS. Forthetrip(occupying 24 days)thecostwillbe235. Thisincludestheairfare,hotelaccommodation(notmeals), surfacetransportationandconferenceregistration.(Wivescan also beaccommodated.) FurtherdetailsmaybehadfromMrFrankBowyer,Value Engineering Ltd.,60 WestbourneGrove, London, W.2,England. Gov e r nme ntandL ocalGo v e r n me n tbuyi ng Accordingtoareporttobereviewedinthenextissueof this journal the Public Sectorof the economy in Britain. . . . . .Spends 41 per centof theG.N.P. . .. Employs over30 percentof the nation'smanpower. . . .Employstwo-thirdsofthosewithfull-timehigher education. . . .Owns50 percentof thenation'scapital assets. . . .Accountsforover50percentofthenation'sfixed investments. . . .Finances about65 percentof thenation'sresearch and development. . . .Absorbs60percentoftheoutputof theconstruction industry. ThePublic Sectorplaysadominantrole in theelectronics,air-craft,construction,pharmaceutical,electricalengineering, telecommunicationsandpower-supplyindustries. 6Value Engineering,April1968 7 ReprintNo.1:1:2 BasicConceptsFunctionalWorthValueStandards LowCostDesign in the AircraftIndustry byG. P.Jacobs* Theresponsibilityofemployeesforcostsishighlightedby thePresidentsoftwoofthemajoraerospacecompanies, andtheimportanceoflowcostdesignforBritishindustry isstressed.Valueengineering-theauthorpreferstobe regardedas'organisedeffortdirectedatidentifyingthe-necessaryfunctionstobeperformed,andforachieving' thosefunctionsforleastcostcommensuratewithperform-anceandtime-scale.'Thisdefinitionavoidstheassumption that,bydefiningthefunction,theperformanceofthe productcanbedefined. Therelationshipbetweencost,performanceandreliability isdiagrammaticallyshownandthe'isovalue'lineconcept explained.'Costcorrection'or'havinga secondgo'atthe designisa relativelyexpensiveprocess. Valuestandardssuchas thoseobtainedbymultiplyingthe costperpoundofweightbythecostoftheitem(giving cost2perpoundofweight)asonemeansofselecting partsforvalueanalysisisdealtwith,andotherbasesfor costcomparisonaresuggested.Over-specification,pro-ducibilityproblems,andorderquantitiesalsopresent avenuesforinvestigation.Fromthisworksuggestionsfor improvementintheformofValueEngineeringChange Proposalsaremade. After'Costcorrection'thereis'Costavoidance'whichisthe achievementofthebestvaluesolutionbeforeexcesscost iscommittedbydeterminingthecorrectalternatives duringthedesignstage.Thisisaidedbytheavailabilityof CostData. Finally,'costprevention'involvesthecreation,through training,ofanenvironmentsuchthatpeopleinstinctively searchforthebestvaluesolution. Iwouldliketobeginbyquoting thewordsofthePresidents oftwo major aerospace companiesin theU.S.A. ThefirstisbyMooreoftheAutoneticsDivisionofNorth AmericanAviation,whosaid: 'Ourstockholders havea rightto fair profits whichcanonlybe obtained by operating at maximum efficiency. 'EverymemberoftheAutoneticsteammustrealisethathe personallyhasanopportunity andaresponsibility to minimise costs.' Thesecondis byAllenof Boeing,who said: 'ForBoeing tostrengthenits position of leadership, maximum costeffectivenessandimprovedprofitrelationshipsmustbe emphasisedand attained. 'Boeingemployeesmustbecomecost-ableandvalue-ableto ensure thatBoeingwillretainandstrengthenitsleadershipin the aerospace industry.' Thesestatementsareindicative ofthegeneralatmosphereof commercial efficiency whichour competitors in theU.S.A.have builtup,andwhichwe mustatleastequal. They underline the absolutenecessityfor ensuringlow costdesignintheBritish Aircraft Industry if we areto survive. Now,what do we mean when we talkabout'low costdesign' ?' Obviously,wearenotinterestedinthenarrowestdefinition, where 'low cost design' could be misinterpreted as that requiring the least cost in the design office. 'Lowcostdesign'mustbetakenasthatwhichgivestheleast totalofdesign,developmentandmanufacturing expenditure. *MrJacobsisManager,ValueEngineeringatthe WeybridgeDivisionoftheBritishAircraftCorpora-tion(Operating)Ltd.,BrooklandsRoad,Weybridge, Surrey,England. ThispaperwaspresentedbytheauthorattheValue EngineeringAssociation'sConferenceheldat Stratford,England,inOctober1967andisrepro-ducedwithgratefulacknowledgement. However, in many cases, the operating costs must also be taken intofullaccount,andthewidestdefinitionis thatof obtaining least total cost, where total cost is the initial cost plus the cumula-tive expense of operating and maintaining the product throughout itslife.In aircraft design,we mustconsidertheimportance of controllingthe initial cost of our products, that is the expenditure whichdefines theprice we mustchargeourcustomers,relative tothatof controllingtheir total cost. Iwill return to this theme laterin the text. Ofthemanydefinitions ofValueEngineering,Ipreferthe following: 'ValueEngineering isanorganisedeffortdirectedat: (i)Identifyingthe necessary functions tobe performed. (ii)Achievingthose functions for leastcost, commensuratewith performance and timescale.' By using this definition, I avoid the assumption that, by defining thefunctionwe cannecessarilydefine, absolutely,theproduct performance. When designing aircraft, some of the performance parameterscanbestrictlydefined, whilstsome of themcannot be.Sotherearetwotypesofperformanceparameterswhich must be considered. First,basic performance parameters,whicharethedefined and guaranteedones of strength, speed, load, range, take-offdistance, andsoon.Theyareaffected, for example,byweight changes whichalmostinevitablyoccurwhen avalue engineerredesigns an existing component. As well as weight changes, we sometimes makeminor changestotheoutsideprofileof theaircraft asa result of introducing modifications to reduce cost, which can also have an effect on the basic performance factors. Secondly,operationalperformanceparameters,whicharethe less welldefined ones of reliability,maintainability,component life, and so forth. There are many examples where value engineer-inghasbeendirectedattheredesignofexistingcomponents, suchasmechanisms,whichhasresultedin asimplerassembly with fewer parts,with subsequent improvements to these opera-tionalperformance aspects. Value Engineering, April1968 7 Figure1 showsthe type of performance improvements we have achieved,comparedwithpublishedU.S.A.Departmentof Defensedata.All ourproposalshavesavedmoney,andmost ofthemhaveimprovedperformanceinonewayoranother. Thisis notalways the case, and considerable judgementis then necessaryin deciding whichalternative toproceedwith. Thisisbecausewearenotnecessarilyattemptingtoachieve thelowest cost,northe best performance for our products, but are seeking to establish the best value compromise between often conflicting requirements. Letusexaminethispictorially.Figure2showscostplotted againstareliabilitycoefficient. Twosetsofcostsareshown. Thosewhichoccurbeforedelivery, andthoseoccurring after delivery.Costsbeforedeliveryincludechargesfor materials, bought-outcontent,labour,testsanddesigncharges necessary togettheproducttoapointofdelivery. Costsafterdelivery, arethosenecessarytogettheproducttothepointof useor operation, and include the provision of spare parts,maintenance, specialsupportandtrainingequipment. Asonewouldexpect,onadesignstandardwheretheinitial costislow, reliabilityisnotinherentlygood,andsubsequent maintenance costs are therefore high. Conversely, if the customer is preparedto pay more initially, he can purchase a more reliable productand save in lower maintenancecosts. Thesumofthecoststopurchasetheitem,andsubsequently maintain it throughout its life, is frequently used in the evaluation ofalternative designs,sinceit permits us,andthecustomer,to assess the relative merits of competing design features or methods, by using a realistic yardstick -money. Thisformofcomparisoniscalled'thetotalcostconcept', andwasfirsthigh-lightedbyHellerofGeneralDynamics.1Inthisexample,theaddition ofthebeforeandafter delivery costs is shownby theuppercurvein figure 2. From this curve wecanidentifythepointofleasttotalcost,whichhowever, is not the point of highest value. Iftherelationship tocostof anyparameter,suchasreliability, is establishedat a given point, we may say, as a result of dividing reliabilitybycost,thatweobtainsomuchreliabilityfor each poundsterling spent.And, if astraightlineisdrawn fromthe originthrough thatpoint, all pointsonthelinemusthavethe same value. Thislineis knownasan'isovalueline',where, Value = Function Cost Maximumvalueisachievedwhen theessentialfunctionis ob-tainedfor theleastcost,anditisapparentthatthelowerthe slopeof thelinedrawn, thehigherthe value. So,for best value, we mustfind the point on thetotalcostline wherewewillgetthehighestratioofreliabilitytocost.We therefore draw alinefrom theorigintointercept thetotalcost line and form the minimumangle to the base. Thisis thetangential lineshown in Figure 3, withthepoint of interception marked 'best value'. Thus, for a relatively small increasein total cost we have signifi-cantly improved the value of the product to the customer. Perhaps amore usualchoicewhichhastobemadeby the air-frame designteam,is thatbetweencostandweight. If the least costalternative is not also thatgiving the lowest weight, how do wedecidewhichrepresentsthebestvalue?Thisisadifficult problemfortheaircraft manufacturertosolve,asitrequires theconsiderationofmanyfactors.Forexample,thetype of aircraft,whetheritismilitaryorcivil;ofhighorlow speed; howthepredictedperformance,intermsofloadcarrying capability,take-offdistanceandsoon,compareswiththe guaranteed figures; how its first cost compares with that which the market will reasonably stand, and so forth. So the manufacturer's balancebetween cost and weight does not necessarilyfollow this process of minimising totalcost. VALUI iNMNiiiuweFALL- OUTBENEFI TSOF ^ B A c i iVALUEE NGI NE E RI NGCHANGEPROPOSALS PERCENTAGEOFPROPOSALSSHOWINGIMPROVEMENTIN:-Uni t edSt at esBri ti sh Depar t mentAi r cr af t ofDef ens eCor por at i on Rel i abi l i ty Mai nt ai nabi l i t y Per f or mance Wei ghts avi ng Qual i t y* Product i on l eadt i me 4 4 % 4 0 % 2 1 % 3 8 % 76% 2 5 % 2 1 % 5 3 % NotAs s es s ed #I TIS NOTKNOWNHOW'QUALITY-ISDEFINED Fig.l Fig.3 1 VALUEOFWEI GHTSAVI NGTOTHEOPERATOR 8Value Engineering,April 1968 Theairlineoperatorshaveevaluatedtheworthtothemofa poundof weight saved.Theyhavedonethisbyassumingthat anysaving in weight is replacedby revenueearning payload. Thesevaluesareshown in Figure 4. Here the value of one pound of weight savedis plottedagainst aircraftblockspeed,whichisthestagelengthdividedbythe elapsedtimebetweendoorsshutanddoorsopen.Theupper curve assumes that the weight savedis directlyreplaced by high revenuepassengerpayload. Using this datum, a maximumvalue of95is claimed for each poundof weight savedon eachaircraft of similar performance toa Boeing 707, over aone-yearperiod of operation. In other words,over aten-yearperiod, one pound of weight savedon a Boeing 707 could result in an increasein revenue to the operator, ofanything upto950. Asis shown by thelowerdotted curve, the value of the weight saved is almost halved if freight is carried. This is a reflection of thedifferentrevenueearningrates. Theseexamplesofcost/reliabilityandcost/weight interaction, demonstrate that best value can quite often be well removed from leastcost.AsaValue Engineerintheaircraftindustry, Iam paidto get the best possible value, not necessarilythe least cost. Theaircraft value engineer'staskisalittledifferent fromthat ofmostvalueengineersinindustry,inthatpracticallyany changewhichaffects cost,alsoaffects performance. Neither is italwayspossibletodefine'function'inmeasurableterms. Furthermore,theaircraftvalueengineerhasmoreflexibility, andmore responsibility in choosing thelevelof abstractionat whichhe candefine his functional requirement. Nowtoconsidersomeof thegeneralactivities undertakenby aircraftvalueengineers. Aconstant,three-prongedattack,withtheobjectives shown in Figure 5, must be maintained if we are to eliminateunnecessary costsfromourproducts. First,costcorrection is the process of replacing existing designs byalternativesthatwilldothejobatlowercost.Thisisa relativelyexpensiveprocess,bothin costandtime,asweare 'having asecondgo' at thedesign. A continual problem is that ofidentifying low value parts,orassemblies,whichare suitable candidatesforredesignfollowingthejobplanprocess.The procedureswefollowintheaircraftbusinessare,basicvalue engineering product evaluation, advice from design and produc-tiondepartmentsofapparentlyunnecessaryexpenditureof materialor labour, complaints fromouroperatorsof highcost spares, possibly associatedwithhigh usage rate,and so on. Ourvalueengineersmaintainaconstantprogrammeofap-praisal aimed athighlightingunnecessarilyexpensive functional solutions.Thisworkinvolvesplottingthecostof structural, andotherparts,againstsomepertinent parameter,in orderto identify expensive groups of items, or expensive individualparts inareasonablyinexpensiveassembly. Figure6 is anexampleof this type of analysis,andshowsthe costof machininglightalloycomponents,manufactured for us byoneofoursub-contractors,plottedagainstfinishedpart weight. Parts of similar function can be identified by the use of a colour code or suitable symbols. Inordertomakeanefficientselectionweneedtoknowthe answerstotwo important questionsregarding eachitem. First, 'Howspecifically expensive isit ?',andsecondly, 'How muchof itisthere?' Theanswertothefirstquestion maybederived fromthecost per pound of weight,and that to the secondfrom the total cost oftheitem.Itwillreadilybeseen,fromanexamination of Figure 6, that the cost per pound ofweight of the items invariably gets higher as size is decreased. So, on its own, specific cost per pound of weight is of little use.Also, an item having a high cost maybe very efficient and have a lowcost per pound of weight. Wecancombine these two aspects by multiplyingtogetherthe costperpoundof weight andthecostof theitem,whichwill give cost2per pound of weight, and then selectthose partswith VALUEENGINEERINGTASK Fig. 5 COSTOF MACHINING LIGHT ALLOY COMPONENTS No. Ofi MACHINING! TOIAl, COSTWEIGHT FRAME MEMBERS MACHINED SKINS BOOMS, TPIECES MISCELLANEOUS '"TOTAL" 8.090 15.335 4.095' 5.430 ;480LB. 1.264LBJ 61 LB. 172LR] 32,950.l,977L8.j / L B FINISHEDWEIGHT-LB. VALUI INOtNf ItlMtt Fig.6 Fig. 7 thehighestproductinordertoestablishsatisfactory priorities forour investigations. Similar analytical work has been carried out on aircraft systems. Forexample,wehaveplotted,costagainstworkdonefor hydraulic sub-systems,cost againstrate-of-fiow and pressure for fuel systems, and cost against a heat load or mass flow parameter forair conditioning systems.Figure 7 is an example of this type ofwork. Asmentioned earlier, value engineersmustalsoinvestigate the disclosureofpoorvalueexamplesreceivedfrom commercial, production and design sources. This work embracesthe revealing byourspecialistsofseeminglyover-elaboratespecifications; complaintsfrom production departmentsof extra cost imposed byapparentlysuperfluousdesignrequirements,andsoon. Also, the policyof ordering may be such thatsmall batches are produced,givingrepeatedsetting-upoperationswhichresult inadditional costs,and this may require investigation. Value Engineering,April19689 rig.8 Havingsortedoutthetaskstobeundertaken,alternative solutionsareevaluated,followingthevalueengineeringjob plan process. 'Before' and 'After' costs, weights and introduction costs areobtainedfromtheappropriatespecialistdepartments, andfromthistechnicalandfinancialanalysis,thebestvalue solutionisselected.AValueEngineeringChangeProposal Form is then prepared, and the lower cost alternative is embodied asrapidly aspossibleinto theproductionline. WorkleadingtoV.E.C.P.changeshasasignificant partto playinanybalancedvalueengineeringactivity.However,our productionrunsarerelatively short,and,becauseof this, two factorsemerge: (i)Developmentcostsarehighrelative tototal projectspend. (ii)The developmentperiod is long relative tototal production life. Theseconsiderationsmakethistypeofworkintheaircraft industrynotasrewardingwhencomparedwiththatofother industries. Secondly,costavoidance,whichistheachievementof thebest valuesolution before excess costis committed, by determining thecorrectalternativeduringthedesignschemingstage.The task of the Value Engineering departmentis to assist thedesigner toselecttherightdesign.Specific dataonthecost implications of alternative solutions are provided, such that balanced optimisa-tionwork,withcostasakeyparameter,canbecarriedout. Assistanceisalsogiven toensurethatthebest manufacturing andprocurementsmethodsareused,andsoon. AtB.A.C. we have preparedand produced a Cost Data Manual. The contentsinclude the costof alternative materials, the cost of variousformsofattachmentstogetherwiththeirassembly times,andmanufacturingcostswhichincludethecostof forgings, castings,extrusions,platework andmachinedfromthe solidparts. We also provide a service for identifying good value design.For example, the best value method of operating air-brakes, of manu-facturing aplug door,aflyingcontrol surface,arudderpedal assembly,andso on. Thethirdobjectiveiscostprevention.Itinvolvesallthose variedactivities whicharenecessarytocreateanenvironment suchthatnewdesignworkisinstinctivelytackledtoprovide the best value solution. Thisrequirescontinualprogrammesofeducationinorderto breakdownthebarriersoftraditionandhabit.People'must be made towelcome change;theymustbemade awareofthe factthatthereasonfortheiremploymentistoimprove their company'sbusinesspotential,andthattheyallcanmakea significant contribution to theachievementof a good return on themoneyinvestedin thecompany. TheB.A.C.value engineeringdepartmentis responsiblefor the following activities. 10 - i i - ...r: ui : i . ' - . . ( { L I G A T I O N S Fig.9 (i)Workshopseminars.Theseareofoneweekduration,and are organisedon the Tell/Show/Do principle. Up to 40 personnel are selectedfor attendance from design, commercial and produc-tiondepartments.Adequateinstruction isgiven,supplemented by suitable films. The participants are then divided into balanced teamsandgiven selectedhighcost,in production, productsto analyse.The resultsof each team's efforts arepresentedduring thefinalsession. Figure8showsoneofourtraining sessionsinprogress.The teamin theforeground advocatedacostsavingof 64 percent onthelargecomponentwhichtheystudied. (ii)Training lectures. These are normally of halfa day duration, andaredesignedtoacquaintthose unabletoattendworkshop seminarswith the principles and methodology of valueengineer-ing.Similar lecturesaregiventoapprenticesaspartoftheir training. (iii)Personnelonloan.Selectedpersonnelfromthedesign departmentsaresecondedtothevalueengineeringdepartment for a familiarisation period of not less than threemonths. (iv)TrainingManuals.Wehaveproducedtwopublications, whichareshown in Figure 9. The oneontheleft is theB.A.C. HandbookofValue Engineering, andtheoneontherightthe CostDataManual referred to earlier in the text. Theotheraspectwhichisof greatimportance,isthe effective demonstrationof thelargecostsavingswhichcanbeachieved through value engineering. A return of between10 to15 to1 on theinvestmentinvalueengineeringiscommonplace.Inany other commercial context this is unbelievably good, and efficient publicityis a necessary ingredient tooursuccess. Of course,we aremostefficient whenoperatinginthe'upstream'areas,but unfortunatelytangible'before' and'after' comparisonscansel-dombeobtained.Hence,wesufferfromtheironicsituation thatthe more efficient we are,the moredifficult it is todemon-strateourefficiency! Perhaps theadventof incentive contracts, suchasthoseawardedbytheU.S.A.Departmentof Defense, wouldimprove this situation, asthey woulddemandsome form of'upstream' book-keeping. However,Iwanttostress that,especiallywhen givenenergetic managerialsupport,andperhapsbetterincentivesfromour major customers, value engineering will always make a significant contributiontowardsimprovingourcompetitiveness.Itcosts littletopromote,andthe financial returnsaremanytimesthe directinvestment. Reference. iE. D. Heller. Professionalism in Value Engineering. Proceedings, FifthNational Meeting, Societyof American ValueEngineers, Boston,Mass.,U.S.A., 21stto 23rd April,1965, volume 1. Value Engineering,April 1968 ReprintNo.1:1:3 BasicconceptsManagementAppreciationMethodology ValueEngineering,its Contribution to Profitability byRex Ferguson,C.Eng.,M.I.Mech.E.,Mem.A.S.M.E.* Theauthoremphasisestheneedforrecognitionbytopothersections-a pointtobeemphasisedattheinitiation managementthataV.E.departmentisfundamentallyastageofV.E. effort.TheaccentisoftentoomuchonCost top-levelactivity.Itisa separateentitylevelinstatuswithReductionandtoolittleonProfitImprovement Theultimateobjectiveofallactivityistoachieveprofitable returnonexpenditureofeffort.Applyingthisconceptof pro-fitability to product exploitation, three major areas of concentra-tionareinvolved-1.Research intomarket demand -bothexistingandenvisaged -in termsof performance,quantity andprice, andtheproduc-tionof aprovisional designand/ormodel; 2.DeterminationandEvaluationofthefunctional activityof each partin relation tothewhole product;and 3.Developmentand Conversion of this approachtoprofitability intoactualprofit through the production of afinaldesign,and employmentofappropriateproductionequipment. Inpracticethesethreeareasareintimately relatedandtoa degree overlap, but for the purposeof clarity in thispresentation suchoverlapping willbe ignored.' Inthis approachto the problem of product profitability, respon-sibilityliesheavily uponValue Engineering,for itbridgesthe gapbetweenthe predominantly theoretical proposalinitiatedat theresearchstage,throughdevelopment,tothefinalproduct design for production. T h eV a l ueE ngi neer i ngAp p r o a c h Effective Value Engineering resultsfrom the co-ordinated efforts ofateamofqualifiedmembers,eachmemberbyvirtue of specialistknowledge andexperiencebeing empoweredtomake decisivestatementscommitmentswithintheteamappropriate tothedepartmentherepresents.Thusthepathtoproduct profitability would bear the approval stampof Research, Design, ManufacturingandMarketing,withCostsbeingaco-opted contributionasoccasiondemanded. Throughoutthe team's deliberationsthe Company'sestablished standards of quality,reliabilityandmaintainability mustbethe basesofalldecisions -quality in regardsmaterialsandwork-manship,reliabilityinundeviatingperformanceinoperation, andmaintainability inlowservicingdemandduringalong productlifeorthatfixedby apolicyof plannedobsolescence. There are four main avenues of approachin the team's contribu-t i on-1.Definition in detail of the marketneedin functional terms of the proposedproductanditscomponents, 2.Translationofthosetermsintopreliminaryandpractical specifications, 3.Implementationthroughdevelopingalternativedesignsto meetthosespecifications having paiddueregardtotheCom-pany'sstandardsof function andmaterial, and 4.Assessmentofmanufacturing costcovering eachalternative design,forsubmissiontoanappropriateauthorityforfinal choice andapproval. Costassessments atthis stage are not final andbinding,butaresufficiently accurate topermit a justifiable choiceofdesignhavinganacceptablemarketpotentialof profitability. This choice having been made,the chosendesign is finalised, full manufacturingdrawingsprepared,andtrueestimatesofcost compiledin regardto both productand production equipment. These costingsexercisea control on equipmentexpenditureand establishabasisonwhichtomeasure manufacturingperform-ance. V a l ueE ngi neer i ngi nAc t i on Allsolutionstotheproblemofaproduct'sprofitabilitymust conform to adefinite patternof manufacturing costgearedto a specific performance and time/quantity ratio. This cost is limited to thesum remaining after deducting from theproposed selling pricetheacceptableprofitandrecognisedoverheadburden, andsets thetargettobe reachedthrough Value Engineering. Theboundariesofprice,performance,quantity,andgeneral outlineof theproductaredictatedbythestateof themarket, andthese criteria provide the broadtermsof referenceto which theValue Engineering teammustconform. Tothese termsthe team relate its activities, and it is at this stage the true penetrating effect of Value Engineering is initiated, and progressedas indica-ted by the Flow Chart, Figure 1. * MrRexFergusonisanEngineeringandIndustrial Consultantwho,formanyyears,carriedoutvalue engineeringprojectsforJosephLucasLtd.Most recentlyhewasthespearheadofafundamental studyintherationalisationofsteel. Def i ni t i oni ndet ai l Fromdataprovided bytheSalesdepartment,towhichisco-ordinatedasnecessaryatheoreticaldesignapproachfrom Research,theteamdefineindetailandincapacity-form the functionaldemandoftheproductanditscomponentparts. Value Engineering,April1968 11 Flowchart i "~~Marl cet"j , _exomi ng1i pn_J, - - - - ]vE^r e s p c . n s i b l e 1||V . E .responsi bl e ,Marketneeds, ,T1 Potenti alproductsi _ _ _ _ _ _,,1 j l jL l 2 ]CfS: i1i ^ / R e s e a r c h> Overl ap Def i ni t i onF u n c t i o n s ' Recordand1^det er2, 3, 4J Trans l at i onSpeci f i cat i ons r ~|Al t ernat i ve!_ J_Desi gnsJ Implementati on^ i i pr r pr t n Feas i bi l i t y -Desi rabi li ty -Practi cabi li ty loi b3 ^Profi tabi li ty] ApprovalI |Overlop|pevel opefor producti on T Manuf act ure T ~]authori ty JRecordandi i di s cardla,c,andd] Fig.1 Functionally as a whole the product must extend in performance aservicetoamarketcurrently coveredbycompetingunits,or provideaservicehithertoneglected. Indetail, eachcomponentmustprogressivelyandsuccessively functiontowardthecompleteandeffective functioning ofthe whole.Onlycleardefinitionandevaluationofthetaskeach componentis calledupontoperform canprovide theterms of referenceonwhichaproduct'ssuccessdepends. Tr ans l at i on These definitions offunction providethedatafromwhichare derived the performancespecifications for the completeproduct assembly,its sub-assemblies, and its componentparts. Too much attentioncannotbegiventothistaskforuponitsdetailed completenessthesuccessoftheproductinoperationdepends, fromwhichstemsitsultimatemeasureofprofitability. 3.Practicability.Hasthedesignmanufacturing practicability intermsof simplicity? Canit beproducedwithstandardrather than special-purposeequipmenttherebylimiting capital expendi-ture?Willinspectionproceduresbesimple?Doesthedesign permitsimple packagingfor despatch to both homeandexport markets ? Itis the responsibility of the Value Engineering team to provide satisfactory answers to these queries,andif properly constituted itcan doso. 4.CostAssessment. Before afinalchoiceofdesignformanu-facturecanbemadeitisessentialanaccurateestimateofthe costof production andrelatedequipmentbecompiled in detail foreach of the alternateproposals,andthemerits anddemerits ofeachbeannotated.Combinedandinreportform,together withappropriatesketches -preferably of anadvertisingnature, thisinformationissubmittedtoanapprovalauthorityfor selectionofthedesignbestsuitedtocreateorexpandtheen-visagedmarket.Havingthisapprovalthefinaldevelopment oftheacceptedproductiseffected andthedesignreleasedto production. ItishereValueEngineeringassuchclearsitsresponsibility, furtheractivitiesbeingtransferredtotheDesigndepartment forthe provision of all necessary drawings, and to the Production departmentforthecompilationofproceduresandcontrol paperwork. T h eP l aceofV a l ueE ngi neer i ngi nt heOr gani s at i on Bythe very natureof Value Engineering activities, withateam ofmen with specialisedexperiencein various though interrelated fieldsof operation, it is often detrimental to its success toimpose controlwithinthestructureof a main operatingdivision. Value Engineeringisessentiallycreativeandmustthereforeinits approachbe entirely free from individual departmentalpractices and restrictions. Throughits leadertheteammusthoweverberesponsibletoa memberof top management if its proposals are to carry the weight ofauthorityinregardtoimplementation.Thisauthorityis usually vested in the Managing Director or the GeneralManager whoseeverydayresponsibilitycoversallaspectsofCompany operation, and by virtue of that fact is an appropriateapproving medium for thefinalreview of the team'ssubmissions. Withhisselectionofdesignandonhisrecommendation,the Board of Directors give consideration to the full factors involved, andapproveor call for modification to the expenditureon what hasnow become anestablishedproject. I mpl ement at i on Fromthesespecificationsthebasicperformancestructureof productdesign is developed.Thence,if available, the theoretical designfromResearchisexaminedandalternativeproposals producedandmeasuredagainstthescheduledmanufacturing cost. In the preparation of these designs existing material standards and productcomponentsshouldbeincorporatedwhereverpossible. Itisappropriateatthisstagetoemphasisetheimportanceof thisprocedurefor frequently theirusepermitsachievementof specifiedperformanceataminimum materialcost. Inaddition to meeting the specified overall performance through themediaofeffectivesub-assembliesandcomponentparts, thealternativedesigns aredevelopedwiththefollowing major considerationsin mind-1.Feasibility.Havingtheessentialquality,reliability,and maintainability,hastheproposeddesignfeasibility topermit realisationof thedesiredmargin of trading profit ? Willitscost bewithinthemanufacturing target? 2.Desirability. Does the overall design promote or create market desirability?Inappearanceisitinlinewithcontemporary appeal? Although Value Engineeringassuchis notresponsible foradvertisingmediatheproductis the'hardcore'of a sales campaign. Directorof engineering projects Staffresponsi bi li ty I|Chi efdesignengi neer] Project||Projectdesign I Ie n g i n M r ProjectFunctionalrespondsibility|Chief\ enginet | engineeringteorn | Productionengineer Cos!estimatingenginet Staffdesigner Staffengineer Servi ceengineer Operationalreliability St af fStaffcost estimating engi neers Information and' implementation: s ect i on Fig.2 Withthiscodeofoperationandchainofresponsibilitywhat relationship does the Value Engineering team bear to the organi-sationasawhole?Muchdepends onthesize of theCompany -whetherasingleorgroupstructure;thenumberofprojects involved -whetherasingle unitora numberdiversein design; andwhetheritisthepolicyoftheCompanyto'gowiththe stream'or to pursue a course of dynamic expansion. At the lower endofthescaleintermittentValueEngineeringattentionis invariably enough,whereas theotherendof the scale justifies a 12Value Engineering,April1968 full-timeteamapplication.However,inbothcasesafull-time leader is required, notonly tocontrol theteam's operationbut also to maintain close contactduring implementation. The place ofValueEngineeringinanorganisationisbestshownona functional basis andin diagramform asin Figure 2. Bearing in minditsimportanceintheaimtoachieveprofitabilitythe positionalstatusasshownisfirmlyjustified,thestatusofthe teamleaderbeing correspondingly high. T h eV a l ueE ngi neer i ngT e a m The permanentmembers of the team aredescribedin the section 'theValue EngineeringApproach'andissolimitedsincethe functional areas quotedcover the overriding principles involved. Itisobviousthatspecialisedknowledgebeyondthatavailable throughthepermanentmemberswillattimesbecalledfor, in thewhichcaseadditionalappropriatepersonnelareco-opted intotheteam -chemistsandmetallurgistsareexamplesof this. V . E .Co- ordi nat i ongroup Group Independent company operat i on Fig.3 V . E .groupGroupman:dir. co-ordi natororgen:man'r V . E . compony " A' M.D. orG.M. company"A" h - A sfi g.2 V . E .n company"B" M D o r G, - ,M, ; ^ A s f i g . 2 componyB1* V . E .M.D.orG.M. company" C"company"C" - Asfi g.2 The effectiveness of the team is always a reflection of the calibre ofitsmembers,andofits leadertoco-ordinatetheindividual effortextendedintoaconstructiveapproachtotheproblems arising from the project in hand. Care must be exercised to solve each problem as it is presented, only modifying them individually as necessary when bringing all into a cohesive whole. Ge ne r a lRe ma r k s For the purpose of clarity this submission hasbeen based on the operationofValueEngineeringinasingleunitCompany concernedwithasingleproject,andtothatendFigure4is so compiled. Witha similar Companywith a numberof projects beingprogressedconcurrently,thesameValueEngineering organisationapplies, the multiplicity of projects merelydemand-inga commensurateextensionof time spent bytheteamon its deliberations. WithagroupofCompaniesresponsibleinoperationtoan overridingBoardofDirectorsitisadvantageousalsotoco-Si ngl ecompany Board ofdi rect ors Managingdi rector orgeneralmanager| V al ue 'engineering ^Research!,Sa l e s Manufoct-~|uring .Cos t s Fig.4 v\r ~ ir nn ordinatetheworkof theindividualCompanyteams througha single full-time Value Engineeringexecutivedirectlyresponsible totheapprovalauthority of themainBoard. This condition is shown in Figure 3. Operating in this way, each memberCompany ofthegroupiskeptfullyawareof newfunctional andmanu-facturing approaches made by the individual teams in the solution oftheirown problems.Muchtimeandeffort canbesaved in effectinggroupdisseminationofknowledgeandexperience, withappreciablebenefitsarisingfromcommonfunctional andmaterial standards andmanufacturingprocedures. ThesuccessfulintegrationofaValueEngineeringdepartment intoanorganisationarisesfromanenvironmentofcomplete co-operationinwhichallCompanymembersparticipate. Ithasnoauthoritybeyondthatofitsownadministration. Itscreativeapproachtoproductprofitabilityisitsdetailed planningtothatend,therealisationofthescheduledprofit beingachievedthroughtheco-operativeeffortsofall concerned. TheValueEngineeringAssoci ati on The Association, with a current membershipof over two hundred andfifty,is growing rapidly. FourmeetingswereheldinLondonduring1966/67andthe Association'syearendedwithacombinedConferenceand Annual GeneralMeeting atStratford in October.Eighty people attendedtheConferenceatwhichtwelve papers were presented dealing with four aspects of Value Engineering -Value Engineer-ingTechniques,Low Cost Design, Value Engineering in Practice, andtheFutureofValueEngineering.Thespeakers provoked livelydiscussionsontheapplicationof valueengineeringtoa widevarietyof products(fromshipstodomesticirons)anda wide range of industries (coal mining to aero engine manuf acture). TheAssociation is publishing thepapersdeliveredattheCon-ference. The1967/68 seasonhasbegunwellwithatalkbyMrW. L. Gage on 'How to Run a Brainstorming Session' whichattracted membersfromasfarafieldasManchester,Bournemouthand Bristol.Thetalkunderlinedtheneedforconsiderablymore work to be done in studying the psychological stimuli required to promotethefree flow of creativethinking,andthe Association is arranging to explore the subject morefully in future meetings. ThefirstregionalbranchoftheAssociationhasnowbeen formed in the Midlands and meetings have been held at Birming-hamandDerby. Therearealsoregionalbranches in theNorth WestandBristolarea in thecourse of formation. TheConferenceSub-CommitteeoftheAssociationhasstarted toplanforthe1967/68Conferencedetailsofwhichwillbe announcedin a later issue of this journal. Aworking party hasbeen setupto investigatetherequirements forcost standards and data sheets, and to liase with theMinistry ofTechnologyandothernational bodiestoseehow best Value Engineering can serve the nation'sindustry in helping to reduce costs. Withatargetmembershipfor theendof1968of sixhundred theAssociation is becomingfirmly established,andit welcomes the co-operationof other bodieswith similar objectives. AnysuggestionsandoffersofhelpwillbewelcomedbyMr P.Higson-Smith,Secretary,ValueEngineeringAssociation, c/oGlynMills& Co., Bankers,25Millbank, London, S.W.I. Value Engineering,April1968 13 Miscellany Que s t i ont heFunc t i onoft heFi ni s h MrP.Astle,GroupValueAnalysisEngineer,Automotive ProductsCo.Ltd.atLeamingtonSpa,usesacomparative finishingcosttable.Headed'IsthatFinishnecessary?'that table asks two questionsof the function of the finish: Is it to give protection? Is it to give customerappeal ? The table then lists the various finishes in order of their increasing cost-1.Oiling for storage (Whizzer) 2.Oiling for storage (Dipping Tank) 3.Chemical Black Barrel andBasket 4.Chemical Black Jigs 5.Barrel Bonderising 6.Still Vat Bonderising -Jig Work 7.Still Vat Bonderising -BasketWork 8.Auto Bonderising and Enamelling 9.Bright Zinc Barrel 10.Tin-Zinc Barrel 11.Copper Barrel 12.Cadmium Barrel 13.Bright Zinc Vat 14.Tin-Zinc Vat 15.Copper Vat 16.Chrome Vat 17.AutoTin-Nickel Vat. As Mr Astle points out thelist should only be usedas ageneral guide.Individualcomponentprocesscostcomparisonsshould be obtainedfrom the Estimating Department. C ons i de r i ngP eopl e Considering peopleis partof aValue Engineer's job. The Value Engineer may draw the designer's attention to the more obvious improvementsrequired in a man/machineworking relationship. This is not where the problem ends. Workingconditionsimposedbymachine-operatingrequire-ments often have a great effect on the health of people -especially older people. In a Sunday Times article (19/11/67) a New Zealand psychologistsurveying world-wideergonomicscould notfind a singleexampleinBritainof jobsredesignedforolderpeople. Suchelementaryprovisions asbetterlightingandhigherwork-benches were almost invariably lacking.' InSweden,' the psycho-logistrecords,'theVolvocarfirmhasaresidentdoctorwhose onefunctionistosuggestwaysofmakinglifemorepleasant for older or disabled workers. I ndus t r y' sTr i bol ogi calNe e ds The1966/67 reportof theMinistryof Technology'sCommittee on Tribology(the science andtechnology of interacting surfaces inrelative motion) mentionstheworkbeingdonetoclosethe gapbetweenthetribological needs of industry andthedemand by industry for improved servicesand education in the sphere of tribology. ItisofinteresttovalueengineerstonotetheCommittee's commentthat'betterapplicationoftribologycouldleadtoa saving by industry of over 500m a year.' Designersshould notethata National CentreofTribologyhas beenestablishedatRisley(Lanes.),theImperialCollegeis running courses ontribologyin London, andtheInstitution of Mechanical Engineersis compiling a bibliography on the subject. 14Value Engineering,April 1968 ReprintNo.1:1:4 MarketingTraining Sharpenup yourSellingPowerwi th ValueAnalysi s byK.W.Hiles,M.A.A.,M.B.I.M.,M.lnst.M.* Companiesfinditincreasinglydifficulttobuyforlessor sellformoreinordertoincreasetheirearnings.Evenwhen vendorpriceshavebeenforceddowntotheircompetitive minimumsandproductpricescannotbeincreased,the marketingmanager'sresponsibilitytoincreaseprofits remainsthesame.Thushecannotaffordtooverlookany meansofincreasinghissalesvolume. Purchasing,manufacturingandengineeringhavegenerally reservedValueAnalysisforthemselvesandtheideaofa marketingmaninstigatingavalueprogrammeisalittle unusual. However,ValueAnalysiscanbefashionedbymarketing managersintoauseful'tool'forimprovingthepenetrating poweroftheirsalesmen.Inthedesignanddevelopment ofnewproductsValueAnalysisisa methodofseekingthe bestratiobetweendesirablequalitiesandtheircost. Salesmenwhoarefamiliarwiththeanalyticalmethods appliedinusingthistechniquecanbeofconsiderable assistancetotheircustomersinhelpingthemtoarriveata better,morefunctional,morereliabledesignforalower cost. AboutfifteenyearsagotheAmericanscoinedanewphrase: 'MarketingConcept'.Theycoinmanynewphrases,mostof whichdisappearfromusageafterashort,ifhectic,currency. 'MarketingConcept'didnotdisappear.Onthecontraryitis still increasing its following andit seems likely to find a permanent placeinthelanguageofbusiness.Itappearsinthecarefully-wordedannualreportsofold-establishedcompanies:'weare adoptingthemarketingconceptastheguidingphilosophyin ouraffairs',theysay.TheNorcrossGroup,reorganisingfor growthafter aserious set-back, announced thatitwouldfollow themarketing concept in its operations, includingthose handling capitalequipment.PureChemicals,asubsidiarycompanyof RioTintoZincCorporation quotes themarketing conceptasits guidinglight. Themarketingconceptis,ofcourse,awholephilosophyof business; a belief that success in the rapidly-changing commercial/ technological worldof today canonlybeachieved byidentifying andsatisfying customer needs; thatitisnolongersufficientto focus attention inwards on products andmanufacturing processes butimperative thatwe lookoutwards atmarkets andcustomers. Manyexperiencedsalesexecutivesviewthistalkaboutthe marketing concept with considerable cynicism.'We've been using itfor fifty years' is notanuncommon reaction, andit is true that somecompaniesrecognisedmanyyearsagothatindustryis primarilyacustomer-satisfyingprocessandonlysecondarily agoods-producingprocess:thatacompanywhichbuildsits operationsonthebasisofcustomerneedsislesslikelytobe caughtinshrinking,unprofitable markets thanonethat centres itsthinkinground products andprocesses. Butmany companies areonly just beginning to recognise the relevance of the marketing * MrHiles,aformerManagingandMarketingDirec-tor,nowteachesManagementandMarketingatSt. HelensSchoolofManagementStudies,StHelens, Lanes.,England. concept,andmanywhonowacceptitarefindingthatagood deal more isrequired when adoptingit thanasimple statement ofintention.Theminimumrequirementisachangeinthe attitudesandthinkingof management throughoutthebusiness. Usuallyreorganisationisalsonecessaryandfrequentlythe marketingpeoplehavetosearchoutnewmarketingstrategies andtechniquesforgetting business. TheClear Conception ofCustomers' Needs Thisiswherevalueanalysiscanplayamostimportantrole, foritcanbeapowerfultoolin thehands ofthesales teamofa companywhichisdeterminedtobefullycustomer-oriented. Usedwithskillandtactbyacompany's sales engineers, value analysiscancontributesignificantlytoimprovedcustomer-relations, enhanced general reputation,abettermotivated sales team,livelierproductplanningandincreasedbusiness.How cansuch results beachieved? Bytraining thesales team so that they can help customers with their value analysis. Competent sales executives have always recognised that commer-cialbenefits accruefromactionbasedonclearperceptionof customer needs.'Let'sdowhatwecantohelpourcustomers; ifwedowewillhelpourselves'isasimple statementofpolicy whichhasservedmanycompanieswell.Withvalueanalysis asatoola sales team canreallygetdowntothetask of helping customerswithouttakingitseyeoffthemainobjectiveofin-creased business. Interestingidea-butexpensive,time-consuming,difficultto control,specialskillsrequired,youmaybethinking.Of course thereareproblems,difficulties.Butalreadysomeprogressive companieshavefaceduptothem,madetheideawork,got resultsfromit.In1964theBritishProductivityCouncilpub-lishedsixteen case studiesinValueAnalysis.Insevenof these cases reference ismade tothebenefits obtainedfrominvolving suppliers'salesengineersinvalueanalysisdiscussions.In several of the cases theactual ideas adopted came from suppliers' representatives. Value Engineering, April196815 Assisting the Customer in his Value Programme Yourcustomermayalreadyhaveavalueanalysisprogramme. The buyerwillbeinvolvedin this (in many companieshe plays aleadingroleinthevalueanalysisteam).Sosuggesttohim thatyoucanhelp: you have awealth of information notonly aboutyour own productsandtheir applications, butalsoabout theindustry generally. By drawing onyourwide experienceof materials,fabricationmethodsandequipment,tolerances, finishes,etc.,hewillbebetterequippedtoengineermaximum valueintohisproducts. Thisapproachtothebuyerhastobetactfullyhandled,but followingthesalesman'sruleofalwaysaskingforanorder (youmaybesurprisedandgetone!)donothesitatetomake thesuggestionthatyoushouldjoinhisvalueanalysisteam. Emphasisethatyourecognisethatvalueanalysisdiscussions necessitate thedisclosureof agooddealof inside information. Youknowwhatasensitiveareathisisandyourcompany's policyistobescrupulouslycareful insafeguardingsuchcon-fidences. Pointouthow muchmore valuable yourcontribution canbe if you areinvolvedearlyin the value analysisprocedure beforecommitmentstomethodsandmaterialsaremade. Agoodbuyerwillwelcometheidea.Duringthepasttwenty years, the buying function has, in many companies, been brought toanewlevelofprofessionalism.Theincreasingspeedand complexityoftechnologicaldevelopmentwithconsequential difficultiesincommunicationshaspointeduptheneedfora closerworkingrelationshipbetweencustomerandsupplier. Theenlightenedbuyerlooksforthis,andencouragescontact betweenhisowncompany'stechnicalstaffandsuppliers' representatives.The value analysis team is a ready-made medium forinitiatinganddevelopingacloseworkingarrangement beneficial tobothsides.We seethese relationshipsworkingto maximumadvantagewithMarks&Spencerintheconsumer goodsfield.Therethecommercial/technicalstaffs of salesand buyerworkside-by-sidetodevelopandperfectnewproducts throughatotallyintegratedworkingprocedurewhichdoes not stopuntiltheproductisin thecustomer'shands. Fromthecustomer'spointofviewthereisnodoubtthata knowledgeable outsiderin the value team can makeconsiderable impact,if onlybecause heis abletoaskthosesimplebut im-portantquestionswhichfocusthinkingonthecrucial issues: 'Whydowe have it thisway?''Whatis really wrong withthis alternative?'Alltoo often these arethe questionswhich insiders are too inhibited to ask,or which they may not even see as being relevant because they have got used to one material, one process, onemethod.Ittakesabig mantoaskaquestionwhichmay produceananswerindicating thathehasbeendoingthe job wrongly for years! The supplier'ssales engineeris in a position tolookattheproblemfreefromtherestraintsofcompany habitsand traditions. Benefits of Supplier/Buyer Co-operation Ido not need to spell out in detail the advantages to the supplying companyoftakingpartinhiscustomer'svalueanalysispro-gramme.By operatingthisprogrammethecustomeris demon-stratinghisintentiontobreakwithtradition,toinnovate,to improve.Alike-mindedsupplier,workingwiththevalue analysisteamonthesamesideofthetable,becomes familiar withhiscustomer'sthinking,theobjectivesheispursuing,his plansfor products.Thereareopportunities in plenty to present yourown newproducts,todiscussandevaluatenewproduct ideas,toensurethatmaximumuseismadeofyourpresent products. Wemustaccept,too,thatwiththeever-widening recognition ofvalue analysisasanessentialbusinesstool,morecompanies withthepowertodosoaregoing toinsistthattheirsuppliers operatemethodicalvalueanalysisprogrammes-astheU.S. DefenceProcurementBureaualreadydoesandasBritish Governmentalpurchasingofficesarebeginningtodo.This trendis alsodiscernablein thebehaviourofindividualbuyers, whoaremoreandmoreusingthevalueanalysisapproachin theirbuying procedures.As thebuying function becomes more efficient, morecloselycontrolled, betterorganised,wehaveto makesurethatourrepresentativesareequippedtodealwith these trendsbyequipping themtospeakthelanguageof value whennegotiatingwiththeiroppositenumbersonthebuying side. Surprisingly,somesuppliersseetheintroductionofvalue analysisby a customerasathreat,assumingthatitwilllead to reducedmargins,increasedcompetition, perhaps atotal loss of business.Sotheyreactdefensively. Asinall areasof business management,anegativeattitudewillproducenegativeresults. Ifyoureactin this way the situation will indeed becomea threat andyoumaywellfindthatyourcustomerhasvalueanalysed youoffhissupplierlist!How much bettertoseethis situation astheopportunity it really is andto reactpositively in the way Ihave suggested. Hereisanexampleofsupplier/buyerco-operation,whichon the face of it wasdetrimental to the seller'sshort-term business, butwhich had the promise of long-term benefits. It is astatement bythe buyerof the A. O. Smith Corporation (largest American independentmanufacturersofmotor-carframeassemblies) quotedin SalesManagement,21stApril,1961, p.130: ' Acertaingauge metalwasbeingusedinourwaterheating plantandapparentlywasdoingthejobquite satisfactorily. Before we gotaroundtoevaluating thefunction of this metal, the vice-presidentof sales for a particular vendor suggested that we might be using a heaviergauge metal thanwe needed. Note that this man's company was (andstill is, I might add) supplying uswiththemetalinquestion.Weinvestigatedandwe found that we could indeed get along with a lighter gauge metal and re-orderedaccordingly.Ofcourse,hiscompanylostacertain amountofdollar volumeonthattransaction,buthis position asareliable, interestedsupplierwasgreatlystrengthened.This isthekindof supplierco-operationwe wantandare receiving underourvalueanalysisprogram'. Dealing with the SmallerCompanies Somesuppliercompaniesarealreadyoperatingtechnical servicedepartmentsatahighlysophisticatedlevelwiththe ultimateaim of ensuringcustomersatisfaction byhelping their customerstosolveproblemsofproductapplication.This involves techniquesof functional analysisandcreative problem-solvingwhicharebasic tothevalueanalysisprocess,andit is alogical step from theprovision of technical service andadvice toofficial involvement in a customer'sorganisedandsystematic valueanalysisprogramme. Manyofyourcustomers,especiallythesmallerones,willnot beusing value analysis.Hereareopportunities tomove in and helpthemlaunchavalueanalysisoperationwithbenefits for them -andyou. If you helpyour customertorun his business betteryourstandingwithhim willbehigher,your relationship closerandyouwillhaveachievedsignificantdifferentiation from your competitors -which is what every marketing executive wouldlike to dowithhis productsand his company. Value Analysis Training for Sales Engineers Whatarethe snags? How do we setaboutusing valueanalysis inselling ? Firstof all your sales engineers have tobe qualified iftheyaretoworkasmembersof acustomer'svalueanalysis teamandaretomakeaconvincing contribution tothe team's achievements.They must be able to offer an understanding of his processandhisbusinessthattranscendsyourproduct.They mustbe able tothinkandtalkin a value analysisway. So they mustbe trained. How long totrainthem?Thatdepends on the men and the market you areselling in.A minimumof 20 hours isnormally required for experiencedsales engineers andin this time you can cover basic techniques(including creative problem solving),terminology andsomeprojectwork.TheTackcom-pany,well-known for their sales training courses, claimtodo a worthwhilejobofvalueengineeringtrainingintwodays. Projects of a 'do-it'type are valuable, although time-consuming, and successful case histories help to stimulate a positive approach tothesubject.Thetechniquecontentshouldbebasedonthe 16Value Engineering,April1968 steps of thestandardvalue analysis job plan: 1.Define objectives 2.Gatherinformation 3.Generate alternative possible solutions 4.Evaluate these alternatives andchoose themost promising 5.Plan intensive investigation of chosensolutions 6.Execute the plan 7.Summarise the findings for decision. Aninstructor who knows your marketandproductsaswellas valuetechniquescanbuildthecourseroundspecific product applicationsandproblems,andthesewillkeepthetrainees' interestandattentionatahighlevel.Agoodsales training manager can usually setup asuitable course after he hashada grounding in value technique. Competent Thinkers and Better Communicators Thecostintime andmoneyoftraining sales peoplein value analysismethodswillcertainly notbewasted.Experiencehas shown that these techniquesdo more than equip a sales engineer tohelpcustomerswithspecific problems:theyenablehimto-handle betterhis everyday workof contacting customers,taking ordersandkeeping hisown headquarters in touchwithmarket changesanddevelopments.Hebecomesamorecompetent thinker,a bettercommunicator, a more valuable companyman generally. Itisin theareasofcommunicationandinformationthatthe worth of value analysis as a basis for industrial selling is demon-stratedmostimpressively. To hold a selling conversation at all it isessentialthatcommon ground should beestablishedbetween buyerandseller.Thesales engineerwhocantalkintelligently abouthis prospect's business and products, who is clearly trying tounderstandthe buyer's point of view and who offers construc-tivethoughtsaboutthebuyer'sproblemswillfindaready audience,for the buyer will have a clear and agreeable reasonfor joining in the conversation: hewillsee'what is in it for him'. Identification of Customer Need Asregards information, every sales engineershould be required tofeedbackdetailsofcustomerneedsandproblemsaswell asmarketinformation generally, sothatproductimprovements andideascanbegenerated.Theheadofproductplanning of RankXeroxsaidrecently'Thecompany'sown resourcesand experiencearethebestsourcesofinformation.Salesmen's reportsareverygood....'Analysisofproductfunctionand identificationofcustomerneedis,ofcourse,fundamentalto thesalesman'sjob.Hehastoworkthroughthisprocessin ordertosetupapresentationofhisownproductsthrough whichhe hopes todemonstratehowwelltheywillperform the functions and satisfy the needs. Unless he does this competently he will not get the order. Value analysis will heighten his awareness ofthe importance of function and need,and improve his ability toidentifythem.Hisapproachtoinformationcollectionwill becomemorecontrolled,moreobjective.Howmanyrepre-sentatives,whenmakingreports,questionthevalidityofthe informationtheyobtain,especiallywhenitappealstothem? Howmanyincludeinformationtheydonotlike,however relevant?Valueanalysisteachesthemobjectivity,anessential attitudewhenconductinginvestigationsofanykind. Valueengineering/analysisisatotalcostphilosophy,i.e.it includesproductreliabilityandquality,supplierstability, service, delivery anddependability. So the value analysis trained representativewillseethetotalpictureandthroughhimthe restof thecompanywillbemadeawareof theimportance of thesefactorsandofcustomer'sstaffworkingwiththeseller's representative,willbecomemoreawareofhiscompany's capabilities. I ftheSales executivereadingthisarticle isstillnotconvinced ofthe value of value analysis training for his men, let me remind himof the attributeswe lookfor if a manis to be successfulas asalesman.Theycanbeconvenientlysummarised: Attitude -mustbe positive Knowledge of product and customer-at a high level Skillin presentation,analysis,etc. -reasonablyexpert Motivation -more than adequate. Apositiveattitudeisessentialforvalueanalysisandpartof thetraining is designedtoovercomenegativethinking. Fortun-ately sales engineers are less likelythanmostto beinhibited by suchblockstocreativethinkingasthestandardreactions' It won'twork','We'vetriedit before'. Value analysistraining willincrease knowledge aboutproducts and customersand increase theabilityto recogniseandusenew knowledge. Motivation,thefeeling of doing aworth-while job, islikelyto beimproved whenasalesengineerobtainsordersbyhelping customersto solve their problems. Asto the actualselling process (which even in thesophisticated area of high-level, technical selling can be representedby the time-honoured formula A I DD A:attention, interest, desire, decision, action)thevalueanalysisapproachagainmakesaworthwhile contribution. To be abletooffer a potential customerhelpwith hisproblems,workingfromaconvincing basisofexperience andpracticalknow-how isagoodstartingpointfor thesales presentation.Attention andinterestare assured, desire, decision andactiondevelopquitenaturallyoutofthevalueanalysis discussions.Productknowledge builds upsteadily andproduct applicationsareequatedwithconsumerneeds-againquite naturally -readilysatisfying theold,butstillrelevantcliche, 'Nobodyeverbuysanything for what it is, butonly for what it does -forthem'. Howfaryougointheuseofvalueanalysisasasalestool depends onyourproducts,your people,yourmarketing philo-sophy.Whilstvalueanalysistraining itselfcandonothing but good,yourpeoplewillonlybecomesuccessfullyinvolvedin yourcustomers'value programmesif they arecapableofclear, analyticalthought,andcreativeimagination.Notallsales engineers have the inherent qualities that are necessary and some companiesprovide avalueanalysisservicethroughaseparate force of serviceengineers.This canworkreasonablywell -but watchoutfortheproblemsdevelopedwhentwomenarein close touch with one customer,and the weaknesses created when responsibilitiesaredivided. Finallywe mustrecognisethatvalueanalysishelpiscostlyto provide.Ithastobekeptinbalance:ordersreceivedmust eventuallyjustifytheadditionalcost.Butsubjecttoproper control,valueanalysisinsellingcanrepaymanytimesthe investmentinvolved.Improvedandmoresecurerelationships withcustomers,moreskilful andbettermotivated sales people, andastrengtheningof yourreputationin thetrade(customers dotalk-attradeassociationmeetings,conferencesandthe like)areallrewardsfortheeffortoforganisinga carefully thought-out training programmein an area which atfirst sight, maynothaveanobviousappeal. **** Inthisarticlewehavebeenconcernedwiththeuseofvalue analysis as an external tool to sharpen the edges of both marketing strategyandselling tactics. The useof value analysis internally bythesuppliertoengineerintohisproductsandservicesthe maximumcustomer-orientedvalueisanothersubject,butnot onetobeneglected.Certainlyanalertmarketingteamwill insistthatvalueanalysisisusedtobuildintothecompany's productsvalueswhichgive them scope for developing strategies superiortothoseofthecompetition andleadingtoincreased marketsharesandhigherprofits. Value Engineering, April1968 17 information as you need it. bmef Directory BMEF its council, officers, aims, objects and activities. Its members,membertrade associationswith details, chief executives. U.K. engineering research associations.British Valve Manufacturers' Asso-ciation, incl. list of members, British Refrigeration Association. British Sewage Plant Manufac-turers' Association. Buyers guide and languageglossaries Illustrated product descriptions. Manufacturers. Trade names Hard cover, 392 pages, U . K .p r i c e 2 . 0 . 0 . E x p o r tp r i c e 2 . 6 . 0 . Obtain your copies direct from: The Sales Manager Trade& Technical Division P e r g a m o nP r e s sL t d . Headington Hill Hall Oxford 18Value Engineering,April1968 ReprintNo.1:1:5 DesignCreativityProductDevelopment TheProductDevelopmentProcess illustratedwi threference toDomestic ApplianceDevelopment byA.R.C.Morphy* Describinganidealproductdevelopmentpatternwith specialreferencetothe'Classicelectriciron,theauthor outlinessevenobjectivesbeforethedevelopmentwork begins. IntheResearchPhasepracticalmethodsforobtainingan optimumdesignsolutionaresetforth,andtheresultsof theirapplicationtothe'Classicironaredescribed. ValueEngineering-intheauthor'sexperience-best comesinatthestagewhereafirmdefinitionofthe proposedproductdesignhasbeenarrivedat.Attemptsto bringitinearlierhavenotprovedsatisfactory.MrMorphy soundsthiscautionarynote-'Abadlyconceiveddesign cannotberetrievedbygoodworkinthelaterstages.' I deal i s edproductdevelopmentprocess Consi derati onofcomponypoli cy Markati ngas pects Fi nanci alospects Manufacturi ngaspects St at ementofneed- Studyofproducto b j e c t i v e s -J Marketres earch _ ^l^__Techni calresearch (advancedevelopment) An a l y s i s ' Synt hes i s Choi ceofopti mumdesi gnsoluti on ICons umerat t i t udej es t i ngEngi neeri ngdevelopment ^i ncl udi ngV. E. ) Fig. 1 Fi na ldes i gn Feedback I nt r oduct i on Theessential part that cost considerations must play in appliance designisbestseeninrelationtotheproductdevelopment processasawhole-aprocessthathasbeendeservingofa criticalre-examinationinrecentyears. Historicallythemajorityofnewappliancedesigns havefailed commercially (excluding straightforward replacements of 'bread-and-butter'lines),andthosethathavesucceededcannotbe heldupasexamplesof'good'design.Thelattercases arise,of course,becausesuccessdoesnotdependpurelyonproduct design. Factors such asBrand reputation andmarketing methods often play a dominant role. Discounting such factors the success/ failureratiohasbeensufficientlydepressingtoleadtoagood deal of rethinking,particularly regarding objectives andmethods ofevaluation andoperation. Inaddition,wheretheappearanceofaproductplayssuchan important part in its acceptance, assessments tend to be subjective andtherefore difficult tocontrol.Aconceptofthedevelopment processisdescribedinthisarticle byreference totheMorphy-Richards'Classic'iron. T h eC or por a t eP r oduc tDevel opmentP r o c e s s Figure 1 shows anidealised version of this process.Traditionally theresearchstageswouldbeomittedandastartmadehalf-way through, attheAnalysis-Synthesis stage, using a background of experience andmaking useof the'crystal ball'. This truncated procedurestillhastobeusedwheretimeisshort(whichis perhapsmorefrequentlythanonewouldwish),tomeetthe needs ofachanging industrialandeconomic situation. *MrMorphyisDevelopmentManagerofthePort-ableApplianceDivisionofBritishDomesticAppli-ancesLtd.,Orpington,Kent,England.Thesubstance ofthisarticlewaspresentedbytheauthoratthe ValueEngineeringAssociation'sConferenceat Stratford,England,inOctober,1967,andisrepro-ducedwithgratefulacknowledgement. Thecyclicnatureofpartsoftheprocess shouldbenoted.This arises because preliminarydecisions have tobetakenatcertain stages before allthefacts areknown.Afterasubsequent stage, when thenecessary informationhasbeen obtained, arecapitula-tionismade,andtheoriginaldecisionsareeitherconfirmed andamplified,orchanged -inwhichcase theprogrammemay wellhavetoberevised. Theprocess asawholeisessentiallyamulti-disciplinaryaffair, farfrombeingapure'engineeringdesign'process. Value Engineering, April1968 19 O bj ect i ves Before startingtheactivedevelopmentofaparticular project, aproperstudyofobjectivesisclearlyofcentralimportance. Foratypicalappliancetheobjectivesmaywellbeassetout below-shown,perhapssignificantly,intheorderwithwhich they strike thepotentialcustomer. 1.Tosucceedat'point-of-sale'. Bothtradecustomers(whole-salers, retailers) and the eventual user mustbe impressedby the product,often in anapparentlysuperficialmannerandwithout demonstration.Theconditionsunderwhichtheproductwill besoldwillvaryandmayaffect theapproachtothedesign. Properlydevisedmarketresearchis generally necessary tohelp define price andspecification (orproductfeatures)andto give pointersonappearance(particular carebeing necessaryinthe last case). Naturally it is to be hoped that technical developments have comeupwithcertainuniquefeaturestogive aleadover competition, butthis is frequently notthe case with'bread-and-butter'products. 2.To satisfy in use. This means, of course, that the product must function satisfactorily from an ergonomic point of view and that itmustbe reliable in use.Reliabilitywillalso affect the trade in termsof service returns. 3.TomeetvariousApprovals requirements,notably toobtain certificationbytheBritishElectrical Approvals Board,andto complywithC.E.E.requirements. 4.To maintain the corporateimage (HouseStyle). The product range mayinclude productsof widelydiffering appearance but anattemptshouldbemadetogivethemacommonstyle. This may be quite indefinable andmay rest, for exampleon the useofacommonIndustrial Designer.Theproductpackaging isanimportantitemin many cases. 5.To makeoptimum useof Companyresources. This involves theuseofcommonparts,processesandplantwhere feasible. Decisionsinthisarea,aswithmake-or-buydecisions,canbe difficult to resolve. 6.Tomakeasatisfactoryoperatingprofitfromsalesofthe product.Becauseofthecompetitivenatureoftheappliance market,retailselling price targetsareoften almostimpossibly low.Hence the need for obsessionalcost consciousness through-outthedevelopmentprocess. 7.To achieveobjectives1 to 5 withina certain budgetin terms ofresources and time. Astudyof theseobjectiveswilltendtothrow upareaswhere insufficient information is available to make certain key decisions. T h i sl eadst ot he' Re s e a r c h 'act i vi t yphas e (Lumpedtogetherunderthis headingarethose activities which aredesignedtoobtain this missing informationandto provide thenecessarybackgroundagainstwhichthemajordesign decisionscanbetaken.)Theresearchactivitiesfallprimarily intotwomaincategories-MarketResearch andwhat maybe termedAdvanceDevelopment. MarketResearchmustbeusedin thefirstplacetodefine the markets to be enteredand to study them, particularly in relation totheexisting competition. Inaddition tothe straightforward factsandfiguresintermsof salestrendsitisvery important from adesignpointof viewtohaveinformationonconsumer attitudestowardsvariousdesignsolutions. Wellestablishedproducttypes(i.e.thosewithhighmarket penetration)tendtohave developedstereo-typedimagesin the public mind which must be taken into account. It is thecharacter-isticsof these'stereo-types'thatweareexploring in themain bymarket research.Muchvariationwillbe found from market tomarket dependingon local conditions and on decisionstaken inthe past by dominant manufacturers in the particular markets concerned.Anexample of this variation isillustrated by reference tothe 'Classic'iron. IncertainEuropeancountries'open'handleironsholdavery strongpositionwhereas in otherstheyachievenegligible sales comparedwiththeconventional'closed'handleiron,and Thefollowing two tabulations are purely illustrativeandare in nowayintendedtobeexhaustive. A.Orthodox solution only Partial Solution Elementor ParameterABCD SoleplateCastIronAluminium diecasting etc. Heating ElementSandwichTubular Cast-inEmbedded ThermostatSlow make-&-breakSnap action Control actuationCamScrewLever CowlM.S.pressingAluminium pressing HandlePhenolic mouldingMelamine moulding ConnectionsWireTape Mains leadB.S.S. etc. 20 Value Engineering,April1968 B.Unorthodox solution permissible Partial Solution Element orParameterABCD Heat transfer meansMetalsoleplatenon-metal etc. Heatgenerating means Mains fed resistance ThermalstorageRechargeablecell +resistance Control meansBimetal +switchSemi-conductor EnclosureMetal pressingPartof soleplatePartof handle Handle materialThermosetThermo-plasticCeramic Handle orientationHorizontalabove enclosure InclinedVertical etc. consumerattitudesreflect this. Onesingle designof ironcould notsatisfactorily meetbothdemands;wechoseasthemost economicsolution todesignin effect twoironswithallparts commonexceptthemainhandlemouldings,thusobtaining maximummarketcoveragewithminimumcost. Certain features of a product involve extra cost and it is particu-larlyimportanttohaveinformationontradeandconsumer attitudestothese,e.g.pilotlight. Obviously market researchcannotin itself define a constructive, forwardlookingdesignsolutionsinceitonlymeasuresthe existingstateofthemarket -althoughso-called motivational researchcan helptogive insight intothewhys andwherefores behindcertainovertlystatedopinions. Thismaypointtothe possibility of new design solutions which still meet the consumers' basicneed. The category I have designated Advance Development includes a studyofsystems,materialsandergonomics(orthestudyof theman/machinesystem).Herewe lookfor improved techni-calsolutions,fortheuseoflesscostlyalternativematerials andsystems,for solutions whichsuit the user more exactly. Animportant pieceof groundwork in this area is asystematic reviewof thestate-of-the-art,in otherwords,the competition. Inthe case of the irononewillof course be looking for cheaper andbetterinsulating materials,possiblyonesthatwillpermit anentirely new andless costly elementdesign. Therewillbea scrutinyofsystemsforcontrollingsoleplatetemperature, includingthefashionablesolidstatecontrols(stillin this case tooexpensive). There will be a study of the user actually ironing (remarkable thought!) using techniques analogousto work-study and experimental psychology. Process development hasan important partto play. Because we aredealing in high volume production relatively large sums can be invested in tools and processes in return forlowcosts per unit. Bythesametokentheinvestmentnecessarytodevelopthe process to achieve lower unitcostis often quicklyrecoverable. InAdvance Developmentwe are generallystudyingthe function oftheproduct typeand thealternativemeansofachieving the function. An a l y s i s - Sy n t h e s i s Asa result of the researchactivity therewill now be a consider-ablebodyof informationwhichrequiresprocessing.In general terms this is done by evaluating solutions to partsof the system againstoneanotherandinrelationtotheobjectives. Many waysof tryingtosystematisethis process havebeenadvocated andthemethodactually usedisverymuchinfluenced bythe typeofindustryinvolved. Todescribetheprocess atitsmoststraightforwardform:The product is broken down into 'elements'or para